Uruguay Government OK's Production Hike for UPM's Frey Bentos Pulp Mill

UPM's Frey Bentos pulp mill in Uruguay will increase production from the current 1.1 million to 1.2 million tonnes per year.

Oct. 3, 2013 - UPM said that the State of Uruguay has granted permission for the company to increase the annual production of the Frey Bentos pulp mill from the current 1.1 million to 1.2 million tonnes.

"The decision demonstrates the State of Uruguayís continuing support to the development of the forestry sector in Uruguay," said Jaakko Sarantola, Senior Vice President of UPMís Pulp Business.

However, neighboring Argentina has for years alleged that the mill pollutes the Uruguay River, which separates the two countries.

"It is lamentable that the interests of UPM are so powerful that they have turned into the factor that determines the relationship between Uruguay and Argentina," said Argentine Foreign Minister Hector Timerman.

UPM-Kymmene had requested permission to increase pulp production at the mill by an additional 200,000 tons per year, but the Uruguayan government granted permission for only half of the amount.

"We have authorized an increase of half of what they asked for," Uruguayan President Jose Mujica said, adding that his decision was "provisional" and subject to UPM-Kymmene's compliance with environmental standards.

"The permanence of this decision depends on the level of compliance," Mujica said. "We are conscious that we have to care for the environment."

UPM said that the Fray Bentos mill will immediately continue pulp production after the annual maintenance shutdown.

According to UPM, the production increase can be take place without additional investments in the production processes. However, UPM plans to invest in a cooling system for the millís effluent water.

"The productivity has increased as a result of focused and professional work of the Uruguayan team throughout the whole forestry value chain," Sarantola said. "Since the start-up of the operations, the millís environmental performance has been excellent and UPM continues respecting the authorized permit limits."

The Frey Bentos mill started up in November of 2007 and produces bleached hardwood eucalyptus pulp which can be used for manufacturing fine paper, magazine paper, tissue paper and carton boards. The mill is located on the banks of the River Uruguay, four kilometres east of the city of Fray Bentos.

SOURCE: UPM and Reuters